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Saturday, 08 September 2007

It's been said many times that content wants to be free. Or perhaps it's really that we want content to be free.

Parents who lecture their children on not downloading illegal content are themselves tapping the mute or TiVo fast-forward buttons during commercials, thereby robbing advertisers of some part of the audience they're buying. That describes my house pretty well. Voluntary payments don't work very well either. We pubcasters say that some nine in ten listeners or viewers do not contribute in a given year -- but actually that over-estimates the contributing percentage because the denominator is taken from weekly cume, while annual cume is a much greater number.

We've seen anti-DRM sentiments become an ideology among an influential segment of Internet and DVR users. Mainstream file-sharers and commercial-skippers all have some personal justification for what they do: Like, commercials are annoying -- time is precious and skipping saves me 20 minutes an hour -- record companies rip off their artists anyway -- the RIAA and MPAA are bullies -- I've already paid for it here, but want to use it there and their stupid DRM won't let me do that. Young people generally just hear "blah-blah-blah" when parents warn about downloading movies or music. You might as well be speaking Latvian.

Are people who pay for content just chumps?

If so, there are a lot of content professionals who are depending on those chumps to make a living -- a very few make a very nice living. Unlike Andrew Keen, I think it's wonderful that amateur content can now be distributed so easily and I'm doing whatever I can to encourage that. But for those of us in the content business, a way of encouraging both wide distribution and discovery of amateur content and at the same time providing an economic base for excellent professional content is the central problem of our industry today.

The best thing I've read in a long time from a content creator's point of view comes from singer-songwriter Jill Sobule -- though, frankly, I'd not heard of her before this. She's a professional, but like all professionals, her work needs discovery also. In an essay titled, Calling All Recording Gurus: I've Got Nothing to Prove, but I Still Need Your Help (See My Video!), she writes of the dilemma for artists like her:

... None of my musician friends are mourning the demise of the record
industry. Most of us got crummy deals anyway and never saw a penny of
royalties. My nephews expect really expensive birthday gifts from me,
as they think that I must be rolling in dough, having been on MTV a few
times. I always acquiesce, not wanting to tell them the truth. ¶ For us, in this YouTube, long-tail, Kara-and-Walt world, it’s an
exciting time. But it’s also confusing. How do I release my next
recordings? Do I still put out a CD in the traditional way, or just go
digital? Do I send demos one last time to the remaining majors or go
indie (this time with a company that lasts longer than a year) and get
a, say, 50/50 deal? Do I just finance the whole thing myself–musicians,
studio, marketing, publicist, radio, promo, video, etc.? And where do I
get the money? How do I pay the rent? How do I support my gambling and
morphine habits? ...

Link: All Things Digital. Yes, watch her video there and go to her web site and download the (legitimately) free 90-minute live performance. It's terrific! --Dennis

Wednesday, 05 September 2007

Robert Andrews has a very interesting interview with Ashley Highfield covering such subjects as the (excessive) time it takes to greenlight emerging media projects, the iPlayer and the various complaints it's attracted, and online advertising. There's a summary at this link (paidContent.org), at the bottom of which are links to the complete transcript and an audio version. --Dennis

Monday, 06 August 2007

The music industry seems to be setting its sites on radio stations for royalty revenue, triggering a debate on the value of airplay. The music industry historically has valued radio airplay enough to send out armies of promo people and have in some cases even provided illegal "payola" for favorable treatment. Dave Van Dyke provides some perspective:

... In 2005 Bridge Ratings conducted a study to determine the influence
radio airplay, Internet airplay and MP3 plays have on the consumer. Due
to this current controversy, we just completed an update on this study. ¶ Here are a few facts:

88% of radio's total audience listens to music radio at least once a week

50% of these listeners consider music radio to be their primary radio experience.

Nearly 90% of these "music primaries" agree with the phrase: "I have purchased music I have heard on the radio."

32% of these radio consumers have purchased music through brick and mortar stores or on-line in the last 30 days. ...

Monday, 16 July 2007

Here is Sondra Russell's latest New Media News Digest. She works for the Corporation for Public Broadcasting and writes the following News Digest on an almost weekly basis. Used here with permission. Her email address is srussell [at] cpb [dot] org. --Dennis

SONDRA’S SUMMARY

> The top story this time is that the MacArthur foundation is exploring virtual worlds. Why is this story top news for public broadcasters? Because the MacArthur foundation is a major supporter of public broadcasting, and the foundation’s interest in Second Life might inspire a forward-thinking station to try something in the virtual world space as well.

> The think piece this time is that it’s time for some “summer reading”

. As things slow down at the office this month and next, I invite you to spend a little time exploring sites that are getting lots of media attention but that aren’t necessarily on your list of frequently visited. Two good sources: the 50 best web sites according to Time Magazine, and the Compete Attention 200. The former is an annual collection of outstanding sites in five different categories, ranging from Arts & Leisure to Web Services. The latter is a list of the top 200 sites that U. S. users are paying the most attention to this month. In the “no surprises here” category, they both feature a lot of social networking sites.

New Media News Digest, June 19th – July 12th, 2007

INTERNET

Foundation With Real Money Ventures Into Virtual WorldFrom the NYT: "For the first time, one of the nation’s largest foundations [The John D. and Catherine T. MacArthur Foundation] is venturing into virtual worlds to play host to activities and discussions and explore the role that philanthropy might play.”

The Next Net: NBBC Becomes National Bye-Bye CompanyFrom Business 2.0: "The short-lived National Broadband Company (NBBC), NBC-Universal's attempt to create a TV syndication network for the Web is now being sucked into the NBC-Fox joint venture to create a YouTube competitor.Â Thus NBBC joins the deadpool

Sony Airs Paired-down Versions of Classic Showsfrom ClickZNews: "Sony Pictures Television is airing paired-down versions of its classic shows on MySpace. The name reflects the three- to five-minute length of each Web episode, which is edited down from half-hour and one-hour shows."

TiVo, Amazon to sell movies straight to TV setsFrom Reuters: "TiVo Inc. on Tuesday said many of its customers can now order pay-per-view movies and television shows from Amazon.com's download service directly from their TV, without a personal computer."

RADIO

Judges clear way for higher Internet radio royaltiesFrom the LA Times: "A federal appeals court panel has declined to delay a substantial increase in royalties that Internet radio stations owe for playing music, clearing the way for the hike to begin on Sunday."

SoundExchange offers compromise to large webcastersSoundExchange, the group set up to collect royalties for performers and record companies, said it has reached out to the Digital Media Association (DiMA) and proposed a voluntary cap on the minimum fees for music played over the Web.

Lala's Free Streaming Goes DarkAt first, the new service was slow but workable, and I gave Wilco's new Sky Blue Sky a spin. Very slick. Then came the day the music died. Users notices the disappearance first."

Sunday, 15 July 2007

For legal advice relating to the July 15th effective date for the Copyright Royalty Board rate decision, broadcasters should consult their own communications law attorneys. Public radio managers should also consult information sent out late last week on the A-Reps list and to Station Resource Group members. Having said that, David Oxenford of Davis Wright Tremaine LLP has prepared a very useful overview of the situation. Link: Broadcast Law Blog. Thanks to Stephen Hill for the tip.

Sunday, 08 July 2007

Emerging from the discussion over Internet music copyright royalty rates in the political realm is the notion now being pushed by the music industry that radio may be hurting rather than helping music sales (think back to decades of music industry payola to the radio industry). See, for example, Olga Kharif:

... Some experts argue that radio, long seen as an industry ally, is now
more of an enemy. In a study published earlier this year, University of
Texas at Dallas economics professor Stan Liebowitz argues that radio
acts as a substitute for music sales. "I am not disputing that radio is
very good in picking which songs are going to become very popular,"
says Liebowitz, the director of Center for the Analysis of Property
Rights & Innovation at the university. "But if radio didn't exist,
we could see a 50% to 60% increase in record sales." How so? Instead of
listening to the radio in their cars, Americans might buy more CDs or
digital recordings, he says. ¶ It's with such conclusions in mind that the music industry is embarking
on a multipronged strategy to get all types of radio paying to play.
Spearheading many of these efforts is SoundExchange,
which collects royalties on behalf of labels and artists. Headed by
former entertainment lawyer John Simson, the organization has emerged
as a force in policing the radio side of the industry much as the RIAA
has taken the lead in strong-arming illegal downloaders. ...

Update 8 July 2007:But in a short post, How To Fix the Music Industry, Umair Haque advises media: stop obsessing about CRB rates and get to the important work of "strategic reinvention." Link: Bubblegeneration. Also, follow the link on this article or here to the interview by KCRW GM Ruth Seymour with SoundExchange's John Simson, et al. --Dennis

Saturday, 07 July 2007

I've
posted a long-ish call for structurally separating the businesses that
provide us with connectivity and those that provide us with services
and content that uses that connectivity. It's called "Delaminate Now!." ¶
It's based on David Isenberg's Making Network Neutrality Sustainable,
which argues that the only way to get an enforceable Network Neutrality
policy is to restructure the industry itself. I also highly recommend
Susan Crawford's Moving Slowly in the Fast Lane.

Friday, 22 June 2007

There has been some chatter on the public radio email lists this week about participation in the upcoming Internet Radio Day of Silence. I posted here about it Tuesday (see comments also), saying that while I was in sympathy with its aims, the stations I manage (Northwest Public Radio) wouldn't be participating.

I always like to post multiple points of view here, and I received the following from Mark Fuerst, who heads up public broadcasting's new media organization, the Integrated Media Association (disclosure: I'm on it's board). With his permission (thanks, Mark), it's quoted verbatim below.

If you care to know my view on this, here it is:

If I were running a stream, I would support it. I would also actively support the work of Kurt Hanson and the coalitions that have been organized to roll back the copyright payment ruling. You can find links to all this at http://www.kurthanson.com. IMHO, the copyright payments, as scheduled, will be crippling for the streaming radio industry, which is still emerging as an important audio option. The cost to public radio and TV alone would be well over $1 million >a year< and grow to be much larger in the years ahead with most of that money coming from the stations that are making the most progress developing sustainable online business models.

My recent survey of 12 stations showed that NO ONE is even close to breaking even on their web services, with the possible exception of stations that are developing a national music presence online--KCRW, KEXP, WXPN, Folk Alley, KPLU, and a few others. Their business model rests principally on membership dollars coming from listeners who live outside their coverage area and not on any form of corporate support or advertising. As a group, these are strong stations that can pay the royalties--that is, they won't be pushed out of business as some of the indie music sites will. But is the size of the copyright payment appropriate for their use of the music? No. It is far too high. Does the legislation that led to the copyright ruling properly balance competing interests and encourage the development of a robust streaming industry? No, in fact, it does just the opposite. Taking $50,000 to $200,000 out of the annual operating budgets of our most successful streaming operators will prevent them from investing in the full development of online radio.

What about the problem of "punishing the listener"? Given all of the audio options available to a modern listener, can we really say that turning off streams for >one day< is >punishment<? I find that word a little strong in this context, especially for public broadcasters. Please, for a moment step back and consider what all of you do all the time: Stop your regular programs and go on endlessly with irritating appeals to : Call now. Pledge now. Support us now. Yap. Yap. Yap. IMHO, >that< is "punishing the listener." And I hate it. On the other hand, it works and until we find a better method, all of you will continue to use that technique to mobilize citizen support for public media.

To me, the Day of Silence has a similar function. It says to all those who appreciate the infinite variety of programming made possible by Internet streaming: Wake up! Something you enjoy is in danger, and there are reasonable solutions that will avoid that danger. Call your representatives and get them working on those solutions.

If many stations and other online music sites honor the Day of Silence, that message will hit home, powerfully and effectively.

I'd really appreciate hearing your comments.

--MF-----------------------------------------------------------------

COMPILATION OF COMMENTS FROM IMA STATIONS

Al Bartholet, WSKU/FolkAlley: I don't think it's wise... we're running information on the issues with a call to action. I don't believe that we should punish those who listen and support our services, would we do that with our radio stations? I doubt it, It's like saying if we don't make our fundraising goal we'll give you a taste of silence. Give the listeners what they paid for or else they'll quickly forget about you, just give them the information, a lot of it, but don't punish the wrong people.

Tom Mara, KEXP: We have discussed this somewhat. I feel the urge to respond in this way, too; we certainly have a lot to lose. That being said, and at the risk of sounding too dramatic, I ultimately believe KEXP can't hold the music hostage. Welcome any thoughts here.

Bruce Warren, WXPN: From a press release: "WXPN will silence its streams on Tuesday as part of the National Day of Silence. While it is a "dramatic gesture", we believe it will draw attention to this vital issue and increase public pressure on Congress and consequently the Sound Exchange to seek a solution that is in the best interests of all the parties, including the artists. While I fully expect that the non-commercial stations will eventually achieve a palatable result, this will only happen if we continue to press our case. Failure to change the outcome may be a burden to only a few of us in the short term, but could be catastrophic for many of us in the near future . We do not agree that the Day of Silence is 'punishing the listeners', rather it is sounding an emergency alert that their listening options could be greatly impacted in the future by the royalty ruling." A press release will go out tomorrow and we will be running messages about this on all of our platforms including our main signal. We're going to direct listeners to various resources online however our goal is to get 5000 listeners to sign our own petition which we will then present to some legislator in Philly and this person will then work on our behalf to get these signatures to the proper folks. Additionally we will have two minutes of silence on our main FM signnal at 4PM. ¶ And later I think my colleagues, particularly the music stations, are overthinking this and are looking at it very myopically. We don't want to "punish the listeners" I look at it more like "we want to educate the listeners so in the future the punishment will be avoided." It's all about mindset, right? That's my personal opinion.

Bill Swersey, WNYC: As of now we're not participating. I think IMA could mention it, without necessarily advocating. Mike Bettison called me yesterday; he was doing an informal poll on the subject. I doesn't sound like MPR is going to participate, but he said he heard KCRW is planning to. Mark Vogelzang, Vermont Public Radio: Our initial reaction here at Vermont Public Radio is to indeed participate, even though the impact is minor in a rural area like Vermont. We would inconvenience a relatively small number of remote listeners for the day, but it would be no different than when technical problems on their end of the internet stream or on our end interrupt the music. I think the value is in the message of solidarity it sends back to our Congressional delegation through the print media that picks up the story, and those who understand that public radio has a significant amount to lose in this long and protracted effort.

Tim Olson, KQED: As of right now, KQED is not planning to participate. (Asked why?)... KQED, not a music format.

Dennis Haarsager, KWSU: Washington stations made it a priority during Capitol Hill Day, and Rep. Inslee from here was one of the original sponsors. This is not a skirmish, but rather a protracted fight in which I believe we will make steady progress because no matter how much the recording industry pushes back, you can't put the genie back in the bottle... They need us for discovery as much as we need them for programming. Where we're vulnerable is that music is struggling as a radio format these days. We urgently need to adapt to the complex realities of new platforms and that's why we need reasonable royalty rates. Along the way, we also need to adopt new business models that recognize the value contributions that each of the players - composers, artists, producers, copyright owners, distributors, and radio stations - make along the way. That's going to happen, but it's going to be slower if the CRB rates aren't moderated. Not to try to influence anyone else, but, since you asked, we're not going to participate in the "day of silence." That seems to me to be punishing the listeners for something that neither they nor we did wrong... Weekly online listing is now about 30 million people, about the same as FM listening was, as I recall, in the mid-1970s (and, coincidentally, the same as public radio's). Would we have shut down our FM station for a day 30 years ago if we had a beef with copyright royalties? I don't think so.

Ruth Seymor, KCRW: KCRW 89.9 FM/Santa Monica and KCRW.com will join with fellow webcasters for a Day of Silence, Tuesday June 26th. The station will shut down regular programming on all three of its webstreams as a protest against the new high music royalties for Internet radio, established by the Copyright Royalty Board in March. KCRW will produce a one-hour program D-Day for Webcasters featuring Pandora, Live365, Yahoo, AccuRadio, SomaFM, indie webcaster Bagel Radio and public radio station WAMU/Washington, DC among others. They will join host Ruth Seymour, KCRW s General Manager, to describe the effects that the new rates will have on their ability to stream and to serve audiences online. D-Day for Webcasters will be webcast all day Tuesday, June 26th on KCRW.com. It will be also be broadcast on KCRW s airwaves on Tuesday, June 26th from 2 to 3 pm PDT. Webcasters are supporting the Internet Radio Equality Act, which has garnered bipartisan support in the House as well as the Senate. In addition, they have filed appeals and a request for a stay with the US District Court in Washington, DC. However, if none of these tactics succeed, webcasters will be required to send checks to Sound Exchange, the collection agency for the record companies and the artists, on July 15th. Rates are retroactive to 2006.

To my earlier comments, which stand, I'd add that for most public radio stations, the problem isn't so much the cost of royalties (if your over-the-air music station doesn't have a weekly cume above roughly 100,000 listeners, the chances of your royalty payment exceeding the floor is small), it's the administrative expense.

I agree with Mark's comments about pledge punishing the listeners. But in this case, turning off the streams is meting out punishment to a class of service that we need to build. Listeners are distributed differently geographically and sometimes find they're finally getting public radio for the first time in their office building. True, no one is close to breaking even on their web services, but if you look at FM at a much later point in its development, we weren't "breaking even" on that either and many still aren't. In the geological time of public broadcasting, the importance of listener-sensitive revenue is a relatively recent phenomenon. For much of our history (and even today for many stations in small and medium markets), some other source of revenue trumps the listener-sensitive revenue we consider when we say "breaking even." FM took more than three decades to reach the listening level that Internet radio has today (for cume, if perhaps not for AQH).

We'll figure out this business about royalties and business models. If I'm invited back for our station's centennial when I'm 75, I'll be surprised if radio-over-IP isn't as important to its aggregate listenership as over-the-air is today.